Co-working spreads to the suburbs

Suburban co-working firm Waterman Business Centres has opened its third flexible office space in Melbourne's outer eastern suburbs.

The Waterman Group has taken a whole 7500 square metre building on the Spooner family's Caribbean Park estate in Scoresby, 29 kilometres from CBD, which it has leased for 10 years.

The move demonstrates how the growing flexible office trend has spread into the outer suburbs far from its inner city origins in refurbished industrial and ageing office buildings.

Waterman's co-working space at Caribbean Park

Waterman already has 5000 square metres of space in one of two towers at Vicinity’s Chadstone Shopping Centre and another office at the Casey Business Centre in Narre Warren, in the Fountain Gate shopping complex grounds.

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There aren’t many operators in the suburbs but they are growing. Victory Corporate Serviced Office has two suburban locations - one space in Chadstone’s second tower and another at 990 Whitehorse Road, Box Hill. Regus has three suburban serviced office locations in Kew, Hawthorn and Heidelberg and in Sydney’s outer suburbs of Blacktown, Parramatta, Liverpool and Hornsby.

Waterman Business Centre’s Chris Jbeily said rapid population growth led the group away from the city.

“The majority of the growth is in the outer suburbs. Commuting into the CBD is becoming more of a hassle,” Mr Jbeily said.

“But the spaces you can do in the suburbs are grander. The reason we are able to do such large spaces is because of where we are,” he said.

Waterman’s tenants include solo operators and start-ups but major corporates GE and ANZ also fill out the space.

“There’s a lot of energy and they want to feed off that. We’ve designed the space to foster community and networking,” he said.

Colliers International national director of office leasing Rob Joyes said 86 per cent of all enquiries for metropolitan office space was for smaller sub-1000 square metre spaces.

“We expect the co-working trend to proliferate in 2018. In particular, we expect providers to target major corporates as opposed to just start-up companies like we have seen in the US,” Mr Joyes said.

“In addition, the trend will extend to occupiers sub-leasing space to co-working providers,” he said.

Louise Rowe, Colliers International national director of office leasing in North Sydney, said a similar trend was witnessed in Sydney’s suburban office market.

“We are starting to see the trend towards co-working flow through into the North Sydney market,” Ms Rowe said. “A number of large co-working groups are looking at new developments such as 1 Denison or 100 Mount Street and WeWork is opening its first site in North Sydney this year.

“The challenge is finding an existing building which doesn’t have a serviced office user already there,” she said.

Colliers director Dan Walker said Macquarie Park is expected to be a hot spot for new co-working space in the next couple of years, given the recent success of the Macquarie University Incubator.

“The incubator, which launched around 12 months ago, is now completely full with start-up companies, and has a long waiting list,” Mr Walker said.

Colliers tenant advisory director Tim Farley said there were mutual advantages to landlord and tenant in flexible spaces which can reduce costs and future-proof accommodation strategies.